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- Convenors:
-
Isaac Abotebuno Akolgo
(University of Bayreuth)
Carla Coburger (University of Bayreuth)
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- Format:
- Panel
- Stream:
- Political Economy of Extractivism
- Location:
- S44 (RWII)
- Sessions:
- Tuesday 1 October, -
Time zone: Europe/Berlin
Short Abstract:
What accounts for the resurgence of development financing crisis in Africa? What roles do trade, and African banking or financial systems play in eradicating the continent’s dependence on external finance? This panel will attempt to deconstruct the domestic and global contraints to financing development in African economies.
Long Abstract:
The new wave of indebtedness that has spread across several Africa countries serves as a reminder that the continent’s persistent cycles of debt crisis is far from over. In fact, combined with an increasing fragile, nevertheless exploitative global capitalist order, this new cycle of indebtedness is producing economic hardships similar to those of the 1980s’ African crisis. Rising inflation, unemployment, and increasingly precarious living conditions, compounded by the COVID-19 pandemic, are pushing young Africans to even more precarious migration journeys to Europe and North American. Why, after more than 60 years of political independence across most of Africa, has this crisis of financing development remained unaddressed? More importantly, what alternatives to generating finance for development exist in the continent’s economies? The global financial order is breaking apart, and rightly so. New alliances are emerging, notably the BRICS. Domestically, new financial instruments and markets (e.g growing capital markets, CBDCs, Mobile Money, etc) are taking root across Africa. How can these be leveraged to respond to the persistent inadequate supply of finance that most African countries face?
Accepted papers:
Session 1 Tuesday 1 October, 2024, -Paper short abstract:
From the concession that liberal tax incentives are offered in extractive industries in Southern Africa, this paper demonstrates how these tax incentives result in unnecessary tax expenditure (revenue leak). The paper proposes a harmonized approach to the design and administration of tax incentives.
Paper long abstract:
This paper accepts that granting tax incentives is often indispensable in the formulation of tax policy especially with respect to extractive industries in Southern Africa. Indeed, all Southern African countries analyzed in this paper offer tax incentives in their extractive industries as a way to become attractive or remain attractive to investors. Importantly, these extractive industries are crucial revenue generators to the economies of the Southern African with a direct link to the poverty, wealth, development and GDP of the countries.
The result of the tax incentives should ideally be an increase or retention of foreign direct investment. However, this is often at a great expense because another inherent consequence of these tax incentives is the revenue loss or tax expenditure that results from them. This revenue loss or tax expenditure is the sums of tax that would have been collected by the Southern African country had the tax incentives not been offered. Despite this apparent revenue leak, the design and administration of tax incentives in Southern Africa is unregulated and unharmonized remaining the sole prerogative of the Southern African country wishing to lure investment. This paper argues that the revenue loss resulting from offering tax incentives in extractive industries in Southern Africa contributes to the crisis of development finance in Africa and should be mitigated. As a way to mitigate this revenue loss, this paper proposes a harmonized approach to the design and administration of tax incentives in extractive industries in South Africa.
Paper short abstract:
Crisis of development finance of Political Economy of Africa is not only real but a trap and perpetual economic strangulation. African therefore needs intellectual, psychical, physical, political resources and socioeconomic emancipation.
Paper long abstract:
Politics as the science of power system to finance, control,share and distribute resources is the basic foundation of all development economics. As a system , political structure has the anatomy of all other developments not only cascaded but depends on and are controlled by the capitalistic political system.Colonisation of Africa trunkated the smooth evolution of political economic system with the coerce imposition of political model that skewed perpetually the system to the colonial powers with Africa supplying the raw human and material resources only to receive finished technology and materials at a higher cost backed by punitive treaties as revealed by Niger,Malian francophone Africa. It is this imposed economic finance cascade that is the bane of African development bankruptcy,debt and dependency that characterised the 'post independent' Africa. On the surface it appears there is independence but the structure, anatomy and physiology of Africa still dependent on the colonial manipulation of inferiority and erosion. It is this understanding, dismantling and eclectic rebuilding the structure that can remove African countries from the clutches of intellectual, psychical, physical, political resources and socioeconomic emancipation.